The Biden Jobs Plan: Details And Analysis For Investors

Summary

• This is a giant bill, and only 39% of it is for infrastructure. Another 29% is industrial policy, the rest housing, healthcare and labor policy.
• I provide a detailed breakdown of the bill and the macro context behind it.
• Opportunities abound. I will follow up in the coming week with discussions of individual companies that look to profit from the bill.

Photo by Vesnaandjic/E+ via Getty Images

This Is A Very Big Bill

You knew this already, I am sure, but the fact sheet released by the White House for the American Jobs Plan hammers home the enormity of it, aside from the $2.1 trillion price tag over 8 years. I’ll cut to the chase up top before we get to the details, because there are very many of them.

Big Winners:

• Construction: All heavy and civil construction companies are going to have to come to play, because there is going to be a lot of work. There is a ton of opportunity in this whole sector, aside from oil.
• Engineering: Ditto.
• Materials: Steel and nonferrous metals, especially copper and lithium. Everything from ore to finished metals. Concrete. Lots of concrete.
• Water hardware.
• The entire EV chain, including lithium-ion batteries.
• Solar panels and wind turbines.
• Freight rail cars and passenger light rail cars.
• Maybe employment services, because the construction job market will be tight.

The Big Losers:

• Every corporation: A higher corporate tax rate for everyone, and a much higher rate for any company playing tax games abroad.
• Large companies will also have an alternative minimum tax based on 15% of EBT.
• Oil: The whole chain from exploration, construction, midstream, etc.

I am going to mention a few companies along the way, but this article is meant to provide an overview of what’s in the bill and the macro context. I am also going to leave out a lot that is not directly related to public companies, infrastructure spending, or industrial policy. I will follow up on individual companies and industries in the coming weeks.

Please keep in mind that there is still a good chance no bill passes. If one does, it will be modified by the reconciliation process, as it is unlikely ten GOP Senators sign on. I’ll update that as events warrant.

So, let’s dig in.

Infrastructure

Photo: Larry D. Moore. Wikimedia Commons

The Works Progress Administration (later the Works Projects Administration) (or WPA) is one of the largest of the Depression-Era programs. There were numerous large projects funded by the WPA, the most famous being the Tennessee Valley Authority, but the WPA also built a lot of the smaller physical infrastructure still in use today, over 80 years later. It built 600,000 miles of roads, over a million miles of sidewalks and street lighting, 40,000 new bridges and a thousand tunnels. There were 40,000 new schools, 30,000 recreation facilities, 2,500 hospitals, a thousand libraries, a thousand airports, and 500 water treatment plants. That is a partial list. I literally walk past multiple WPA projects still in use every time I walk around my neighborhood.

The other big Depression infrastructure program was the Public Works Administration which built the big stuff — the Triborough Bridge, the Lincoln Tunnel, and the Hoover Dam, to name a few. Just about all of it is still in use. The total price tag on the two programs was about $160 billion in 2020 dollars (gross Federal Government investment deflator).

Then during World War II, General Eisenhower became quite envious of the German highway system. In 1956, President Eisenhower initiated the Interstate Highway System to tie together the tangle of county, state and Federal roads, and create a standardized driving experience coast-to-coast. The original 10-year bill was about $470 billion in 2020 dollars.

I think these were pretty good investments, but the Depression-Era infrastructure is coming up on 90 years old, and the first interstate highways were laid down 65 years ago.

This is a $2.1 trillion bill, but only $868 billion is infrastructure by my reckoning. This is how I would break it down:

So, despite media reports to the contrary, this is not an “infrastructure bill,” but a jobs bill with a plurality of the spending on infrastructure.

The infrastructure parts, over 8 years:

• $115 billion for bridges, highways, roads, and main streets.
• $85 billion for mass transit modernization and expansion.
• $80 billion for long-distance passenger and freight rail.
• $42 billion for airports, ports and inland waterways.
• $20 billion for reconnecting neighborhoods that were cut off from cities by the Interstate Highway System.
• $50 billion for natural disaster resilience of existing infrastructure and open areas.
• $111 billion for water infrastructure.
• $100 billion for rural broadband, harkening back to the Depression-era Rural Electrification Act, which cost $3.3 billion in 2020 dollars.
• $100 billion for the electric grid and other power infrastructure projects. Part of this I consider industrial policy, but the White House did not break the budget out on that part.
• $100 billion for new and repaired public schools.
• $37 billion for community colleges and day care.
• $28 billion for VA hospitals and Federal buildings.

That adds up to $868 billion, or 37% more than the sum of the inflation-adjusted costs of the Depression-era programs and the original Interstate Highway System. This is a large infrastructure bill, even though that is only 39% of the total.

So you can see right off the bat why construction and materials are going to be the big winners here. The very first company that popped into my head while reading this is MasTec (MTZ). Their pipeline construction unit services the oil and gas industry, and this bill is the death knell for oil consumption in the US. But there will be so much demand for water infrastructure that they may be able to pivot to water, as there is a lot of overlap there. The real story is the other four units — bridges, electrical transmission, renewables, and communications construction. They are right in the sweet spot of $426 billion in new Federal investment over 8 years.

Heavy and civil construction and engineering, with specialties in any of the aforementioned, are the big winner overall winners in this bill. Others:

• Concrete. There will be so much of it that when they add it all up, the numbers will sound impossible. You can really pick any company selling concrete that is domiciled in the US.
• Steel. There will be lots of steel, again, domiciled in the US. This will go through the entire chain from mines, to finished metals and factory equipment.
• There will be lots of copper wiring, transformers and other electrical hardware purchased.
• Fiber optic cable, network hardware, and anything that comes with it. The broadband providers will get a whole bunch of new customers, but the bill looks less favorable to them.
• The water infrastructure part of the bill cuts a wide swath in that industry. I have long owned the Invesco Water Resources ETF (PHO), and I’ll break out some of their large holdings at another time.
• Rail cars and buses.
• Employment and training services, because construction employment will be tight, and will have to draw in unskilled labor.

Industrial Policy

The next biggest portion at $654 billion is what I would call industrial policy. This comes in 3 chunks:

• $174 billion for EV development including domestic supply chain.
• $180 billion to “invest in R&D and the technologies of the future.”
• $300 billion to “retool and revitalize American manufacturers and small businesses.”

There is a fourth part we don’t have an exact number on. This is tax credits for renewable energy generation and storage. This gets lumped in with the $100 billion for the grid, and the White House did not provide a dollar figure on what those tax credits would cost.

Let’s look at these individually, starting with EVs. Like the rest of the industrial policy, pretty much all of it is about domestic manufacturing capacity. The main bullets they provided:

• Rebates and incentives for American-made EVs.
• Grants and incentives for local governments or companies to build charging networks.
• Replace 50,000 diesel transit vehicles with electric.
• Electrify 20% of school buses.
• Electrify the Federal fleet.

The biggest winners here will be lithium-ion batteries and lithium. This is less a win for manufacturers of passenger EVs than it is for manufacturers of commercial EVs, but it will speed the adoption of electric vehicles for sure. For the passenger EV manufacturers, it’s better to be pure-play. Production in the US is table stakes now.

The big loser is oil, which already had a problematic return from the pandemic with persisting work-from-home and reduced business travel. This bill is the death knell for petroleum as the primary transportation fuel in the US.

Next up is $180 billion for research and development.

• A new technology directorate at the National Science Foundation: $50 billion.
• Biden “also is calling on Congress to provide $30 billion in additional funding for R&D that spurs innovation and job creation, including in rural areas.” I don’t know what that means.
• Funding for upgraded university research labs: $40 billion.
• Establishing an Advanced Research Projects Agency on the Defense Department model for climate: $50 billion.

Lab supply companies like Thermo-Fisher (TMO) will be working overtime. But there is also money in there for network and computing upgrades.

Finally, we have $300 billion for manufacturing, in addition to the EV stuff.

• $50 billion “to create a new office at the Department of Commerce dedicated to monitoring domestic industrial capacity and funding investments to support production of critical goods.” I don’t know what that means.
• $50 billion for the bipartisan CHIPS Act to fund semiconductor manufacturing capacity in the US. For scale, Intel (INTC) is spending $20 billion on two new foundries.
• $10 billion on various pandemic prevention measures including medical supply chain and national stockpiles.
• $46 billion of Federal procurement will now take climate into account. This may or may not overlap with the EV section above.
• $20 billion for “regional innovation hubs”.
• $14 billion to the National Institute of Standards and Technology to partner with, and support manufacturers. Despite its name, that’s actually what the Commerce Department agency does normally. This is just a lot more funding for them.
• “Invest more than $52 billion in domestic manufacturers. The President is calling on Congress to invest in existing capital access programs with a proven track record of success, with a focus on supporting rural manufacturing and clean energy.” I don’t know what that means.
• $31 billion for “credit, venture capital, and R&D dollars” to smaller manufacturers.
• $27 billion not specifically called out.

In the first place, you can probably tell that I am very unclear about how a lot of this works in practice. They seem to want to use existing agencies, but this would be a massive scaling up of their operations. The big thing I don’t understand is who decides where all this capital goes to.

So I am also unclear as to who the winners and losers are aside from this: anyone making factory equipment will have a full order book. This will be especially acute in semiconductors.

The Other Stuff

Overwhelmed yet? Have you lost any sense of scale? Both would be understandable, but we have only accounted for two-thirds of the spending in the bill.

First we have $213 billion for housing.

• “Through targeted tax credits, formula funding, grants, and project-based rental assistance,” produce or rehabilitate one million units in the US.
• $20 billion in funding for the Neighborhood Homes Investment Act, which provides tax credits for new units in low-income neighborhoods.
• Grants to localities that ease up zoning restrictions in residential areas. This will make my urbanist YIMBY friends very happy.
• $40 billion for repairs and rehabilitation of public housing.
• $27 billion in block grants to upgrade the energy efficiency of existing residential structures.

Again, construction and materials are the big winners here, and add lumber to all the others previously mentioned. One left-field play here is heat pumps. There are going to be a lot of new heat pumps in new units.

Next is $400 billion, the largest single program in the sheet, for expanding at-home long-term care for seniors through Medicaid. This will be a big boon to medical staffing outfits like Cross Country Healthcare (CCRN).

The final item is $100 billion for worker training and retaining programs.

Taxes

No, we’re not done. There’s also a giant corporate tax bill attached. This is whole article unto itself, and I am mostly going to punt here, because I am not a tax expert by any means, and I need a lot more time to understand the complexities here.

But the overwhelming theme here is to raise effective corporate tax rates, and make re-domiciling corporate inversions less attractive. You are going to see a lot of hair-on-fire commentary, which I encourage you to ignore.

We are going to talk about the other macro elements of the bill in the next section, but I just want you to understand the context here. In the first place, you have to distinguish between effective and statutory rates.

Before the 2017 tax bill, the effective rate was 19% when the statutory rate was 35%. What you see in that blue line is the increasing effectiveness of corporate tax avoidance. After the tax bill, with a statutory rate of 21%, corporations were paying an 11% effective rate. So the first part of the hair-on-fire commentary you will hear is that we will have relatively high corporate tax rates. That has not been the case since 2007. I don’t know what exactly what will happen to effective corporate taxes in the wake of this bill, but they are unlikely to be high.

The second part of the hair-on-fire commentary is that raising the statutory and effective rates will kill investment. We know this isn’t true because the opposite did not happen after the 2017 tax bill.

The tax bill passed at the end of 2017. Asset-heavy companies got a big retroactive cut for tax year 2017, but everyone got a big cut in 2018. What you see is a big surge in investment in anticipation of the bill in 2017 and through Q2 2018, but then from Q3 2018 though the beginning of the pandemic, investment tanked. We’ll talk about why in a moment.

Tax experts are often very smart people with incredible depth of knowledge of how our massively complex tax code works. I listen closely to what they have to say. But sometimes when all you have hammer, everything looks like a nail. Tax rates do have a large influence on behavior, but they are not the only thing, and far from the most important. When it comes to corporate investment, there are much bigger questions, such as, “does anyone want to buy this stuff?”

But this will have a giant effect on shareholders. On net, the entirety of the corporate tax bill went into increased buybacks and dividends. This party may not be over, but the keg is getting empty.

The Macro

First, let’s talk about what the broad macro goals are here.

• Fix and modernize infrastructure that is very old.
• Bring manufacturing capacity back to the US.
• Focus that on clean energy, especially EVs, and semiconductors.
• Expand basic research, again focused on those areas.
• Bring wages up at the bottom end of the scale.
• Bring down housing costs.
• Broaden economic growth geographically.
• Have corporations pay for a lot of it with increased taxes to fund the largess headed their way.

Unsurprisingly, that’s a large bill of goods. What is happening that requires such a massive government intervention?

• Chronic underinvestment in public infrastructure at the Federal and state levels for decades.
• An unusually sharp decline in US manufacturing output during the financial crisis, and a very slow recovery from that.
• Slow consumption growth.
• Climate change.
• Underinvestment in basic research.
• Income inequality.
• High housing inflation.
• Wealth and income concentration in high-productivity regions.
• Absurdly low effective corporate income tax rates due to increased avoidance.
• Chronically low inflation and interest rates.

These are all serious problems that prevent the US economy from reaching full potential now and more so in the future. Broadly, we can look at a lot of this as trying to reverse the negative effects of globalization without reversing globalization. But the next question is whether these policies, and their very high price tags, are going to accomplish their goals without creating a whole new set of problems.

Public Infrastructure

I’m not going to waste too much time on this. The last big public works project at the Federal level was 65 years ago. There is widespread agreement that the public infrastructure in the US is in a general state of disrepair. If anyone wants to argue in the comments that the Depression-era programs or the Interstate Highway System were bad investments, have at it.

While this package is significantly larger than the inflation-adjusted bills on those programs, this is far broader than them. Frankly, the price tag is lower than I expected, and I worry that some of the other stuff crowded out more investment here.

Basic Research

The simplest way to think of basic research is research to answer interesting questions or solve problems with no near-term commercial application. Most of this money is “wasted” in many people’s thinking, as it goes nowhere. But the important thing with basic research is to let scientists and engineers chase wild hares, because sometimes they catch one.

The example most people are familiar with is the thing that brings us all together today, the internet. It began at the Defense Advanced Research Projects Agency to keep open survivable lines of communication in the event of a nuclear war, something that never occurred. For a couple of decades it was almost exclusively used by the military and academia. You know what happened next.

Also, not for nothing, but the mRNA vaccines that are saving our bacon began as government-sponsored basic research.

But the description of the programs seems to be too directed towards certain near-term challenges to me. The point of basic research is to let the direction determine itself to a large extent. For example, ten years ago, a similar program with this much direction may have skipped over some of that foundational mRNA research.

Income, Consumption and Manufacturing Output

This, unfortunately requires a much longer explanation. The first thing is slowing real consumption growth.

Even before the pandemic, the last 20 years have been the slowest growth period for real consumption since World War II ended. The second part is that in the same period, the US economy shifted away from goods, and towards services.

That line is the percentage of personal consumption expenditures that go to goods. As you can see, that is pretty much a straight line down from 61% in 1950 to 31% in 2019. The pandemic saw the biggest shift since the 1940s in the other direction.

So, goods consumption is about half of services consumption, even after the pandemic shift. It is a much less important part of the economy than it once was, and so too is manufacturing. Still, that was $4.7 trillion of goods consumption in 2020, so it’s hardly nothing.

The next part is that goods imports are a much larger portion of goods consumption in the US, but that trend peaked in 2008.

That’s a rough measure of what portion of goods consumption by businesses and households is being supplied by imports. It was at 51% in 2008, 43% in 2019. So it’s not so much imports that have been displacing domestic manufacturing since 2008, it’s that nominal goods demand took a big hit during the financial crisis, and never really fully recovered. There is less investment and less domestic production.

That dip in the financial crisis was unusually sharp. The problem for workers is that there are now far more jobs in service-providing industries than in manufacturing.

Those lines are the percent of all jobs in manufacturing (blue line) and in service-providing industries (red line). As you can see, that gap has widened greatly. Now only 8% of US jobs are in manufacturing, due to all these factors we’ve discussed, and increased factory productivity.

The workers’ problem is that on the low end of the pay scale, manufacturing pays a lot more.

That’s a difference of $170 nominal 2019 dollars in weekly take-home pay for production and nonsupervisory workers. So this is one of the biggest contributors to income inequality — higher paying line jobs in factories were replaced by lower pay service-sector jobs. Lower wage workers have a higher propensity to consume the marginal dollar of income, so reducing their income comes directly out of consumption.

So all these things — slow consumption growth, the loss of the manufacturing job base, and income inequality are closely bundled and form a vicious cycle that this bill seeks to break.

But the question of means and ends comes to bear here. There was no massive conspiracy to move manufacturing to Latin America and Asia. It reduced costs considerably and resulted in this chart.

US factories shut because they were no longer competitive. One reason is those higher manufacturing wages we just discussed, but there are a host of other reasons. The largest beneficiary of recent Chinese tariffs was Vietnam, not US manufacturers.

In 2019, goods imports from Vietnam rose by 36%. Biden hopes that these investments in US manufacturing capacity, coupled with the first-mover big customer in the US government will create economies of scale that will make US manufacturing competitive again. It is far from self-evident that can happen when coupled with high wages, also a goal of the policies. There may be a whole bunch of new factories, paid for by the Federal Government, with no customers besides the Federal government.

In the first place, pandemic aside, consumption patterns continue to move farther away from manufactured goods. The emergence of digital goods only accelerates this. Secondly, there is no evidence, absent inflationary tariffs, that these industries will be competitive when paying much higher wages.

But more broadly, the bill treats the key industries as if they are starved for capital. This couldn’t be farther from the truth. As an example, Tesla (TSLA) is right in the crosshairs of all this industrial policy with EVs, solar and energy storage. Since 2011, Tesla has raised $25 billion, $10 billion in 2020 alone. Since 2011, they have spent $19 billion on Capex and acquisitions, and another $8.4 billion on R&D.

Intel (INTC) also just announced a $20 billion investment in new manufacturing capacity in the US.

They do not need the help. No one does. In the last 10 years, US nonfinancial corporations raised $7.7 trillion in new debt. $1.5 trillion of it was in 2020. Cash, equivalents and Treasuries at nonfinancial corporations was up by $1.1 trillion in 2020. 2020 was the biggest year for new listings ever, and there were more secondary offerings than I care to count. People are throwing cash at blind SPACs, NFTs, crypto, and residential real estate already up 11% YoY. Capital supply is not a problem.

Let me try and sum it up, because this is at the core of what the industrial policy seeks to fix.

• The loss of manufacturing output and reduced factory employment comes from several places.
• Globalization has encouraged manufacturers to move to low wage countries.
• But import dependence peaked in 2008.
• Pandemic aside, consumption patterns have been moving away from manufactured goods and towards services for many decades. The rise of digital goods accelerates this.
• US manufacturing output took an unusually large hit in the financial crisis and never really recovered.
• By 2019, manufacturing only accounted for 8% of jobs, about the same number as food service.
• It is far from self-evident that funding a bunch of new factories will bring customers. The factories left for a reason, and that reason still holds — the relatively high manufacturing wage in the US.
• None of the key industries called out in the industrial policy are in particular need of capital. In fact, quite the opposite.

The basic idea is “build it and they will come.” I think that only works in the movies.

Regional Inequality and Housing Prices

These two are also closely tied together, and of course play into general income inequality. Another negative effect of globalization has been that the US now has regions, mostly on the coasts, with much higher productivity than others, and far higher wages, and cost of living. This is especially acute with housing.

The wide acceptance of video conferencing during the pandemic is already leading to a trend of people leaving these high-productivity areas for lower-cost regions, without losing their high-productivity jobs. This bill hopes to accelerate the development that will bring by bringing the high-productivity jobs to those regions. This will alleviate housing costs on the coasts. But I remain skeptical that this industrial policy can survive long term without the Federal government as a customer.

The other part of this is to alleviate housing prices in the high-productivity cities. Wages are higher, so more people want to live there, and housing stock has not kept up. The biggest issue here is all local in origin — zoning restrictions. That is a problem if you are trying to craft Federal programs.

So the bill seeks to get around this in two ways. In the first place, it focuses a lot of the effort on rehabilitating existing structures, which gets around current zoning restrictions. The other is to offer Federal incentives for local upzoning. In any event, the Federal government’s role here is severely limited by federalism, but this is not a bad swipe at it, considering that.

Opportunities Abound

There is a lot here, and there is a lot I left out like inflation and rates, which this will all certainly effect, at least in a small way. There is a lot in the bill I like, and there is much I don’t. I think you can tell which is which.

But the immediate takeaway as far as financial markets are concerned is that there will be a lot of opportunities, especially in civil and heavy construction/engineering, materials, and factory equipment. In the coming weeks, I will be highlighting a bunch of these if you’d like to build a portfolio. I’ll be starting with MasTec, who by my count are in the sweet spot of $426 billion in construction spending. Their total revenue in 2019 was $7.2 billion.

Feel free to suggest more in the comments. Opportunities abound.

Analyst’s Disclosure: I am/we are long PHO, MTZ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Comments

[Tarheeboy9712]

Total and complete clown. Worst in history.

[jack kreg]

Chinese workers are looking to rake in Billions if not more from solar panel orders, where they hold 80% market share, Buy Bank of China, with Bidens ship jobs to China tax hikes, setting US corp taxes, Fed+St to over 30% with China tax under 25%. But what to expect from a man whose family took Millions from Bank of China, aka Hunter and Brother Jim!

[JRS5]

American Recovery and Reinvestment Act of 2009....Groundhog Day....

[JRS5]

Mr. Author: Do you have a breakdown of who are paying that "lower effective tax rate" that you imply all corporations are paying? I can assure you that most small and medium size businesses are paying the FULL tax rate. But please look this up and get back to me.
Also, do you know what size businesses employ the most people nationwide? Do you know what will happen to many of those jobs when the REAL tax rate is raised? Do you think it's good to destroy small business in this country?

[Trading Places Research]

@JRS5 Do you understand how averages work?

The current system steals from small businesses and gives it to large one. Good luck to you.

[JRS5]

@Trading Places Research "The current system steals from small businesses and gives it to large one." If you mean that in the current system, small business pays the full tax rate while the large businesses generally do not, then I agree. And small business is the largest producers of jobs in the US. So back to my original question, what do you think is going to happen to the jobless rate when the tax rate is increased? This is a job killing bill - no way around it. Big corporations are in bed with big government (they are essentially one in the same now) and the tax portion of this bill is certainly being driven by them. Not good for the working class though. In fact this entire bill is probably the largest involuntary transfer of wealth in US history. Good luck to you too.

[100centsofadollar]

@JRS5 In answer to your question, "What do you think is going to happen to the jobless rate when the tax rate is increased?" the answer is, not much. "The National Association of Business Economics released a survey earlier this year finding the overwhelming majority of US businesses - or 84% - didn't speed up their hiring or invest more as a result of the Republican tax cuts." Business Insider 12-22-19. markets.businessinsider.com/...

[terryongarland]

There is so much ...stuff in this bill..we can only guess what it all means. Have many questions..but a few stand out.
Zoning..a play to allow the building of high rise living in urban single family home neighborhoods..even in LA this was rejected by the voters recently.
Building of infrastructure..require skilled trades, already in short supply..where is the skilled labor coming from ..our open border ?
Too many words come to mind in this monstrous bill..that is seemingly designed by some party apparatchiks..

[Trading Places Research]

@terryongarland

1. The zoning thing. This is impossible for the Feds to do anything about. That’s why the program is designed to focus on existing structures built before current zoning, and incentives to get localities to upzone. But NIMBYs gonna NIMBY. They are my neighbors, so I have first hand experience.

2. See comment below on labor seekingalpha.com/...

3. This was actually designed by some very smart economists. There is much in there I don’t like, mostly the industrial policy. That comes from Biden, directly. He thinks he can return us to an economy with lots of middle-class manufacturing jobs. I disagree. My take is that if we want to raise the low end of wages, we should do so in services. This is a larger sector, much less off-shorable, and the wages are lower than manufacturing. Manufacturing wages did not become relatively high by some magic. It was unions who did that. But they also sowed the seeds of their own demise by doing so. Anyway, manufactured goods become less important every year, pandemic aside.

[Will-G]

These have huge carbon footprints;
Concrete. There will be so much of it that when they add it all up, the numbers will sound impossible. You can really pick any company selling concrete that is domiciled in the US.

Steel. There will be lots of steel, again, domiciled in the US. This will go through the entire chain from mines, to finished metals and factory equipment.

And after eight years only 20% of school buses will be electric, that not much, I don’t think this is a great BILL for the Atmosphere, just re enforces CARS for the NEXT eighty years.
The rest of the World will block your petroleum use, if not because it’s running out, but because it’s adding carbon to the Biosphere, just burning such a remarkable and useful resource, won’t do !

[eurdone88]

I don't know how a billion dollar corporation paying 25-29% in taxes makes it a "BIG LOSER".
Pretty sure losers don't need to pay any taxes, see Donald Trump's tax returns for proof of what "BIG LOSERS" typically pay.

[Trading Places Research]

@eurdone88 They are paying 11% now

[Eurogolfer]

Good article. I agree and have heavily positioned myself in three areas outlined that are already paying off big-time even before President Harris told Vice President Biden to push the infrastructure bill: copper mining, electric car tech firms and EPC’s. In six months, I am up a total of 29% on my entire portfolio with just 40% of my total assets deployed in these three sectors. (The remaining assets are in safer blue chips, munies and other instruments.) My biggest winner is FCX. I think there is lots more upside in these sectors.

[DadRuss72]

Let’s just keep printing money. It worked for Rome.

[AnonymousAlpha]

US companies pay Ireland taxes instead of to US, because all Ireland did was like two decades ago cut their corp tax rate, and they just rake in billions of $ from US companies each year. No president, congress, or senate did anything till Pres.Trump, then companies were looking to comeback to US and pay here. Now the new admin is going to hike corp taxes, aren't we going to be in the same situation as before. No politics here.

[jack kreg]

@AnonymousAlpha Yep, bye bye US corps to Ireland and lower taxation for stock holders, lower jobs for US working class, lower standard of living for US working class, But the Biden vigilanties are popping the Champange, they are getting pay back for the hatred of American success. Time for change from Biden destructive ways.
One good bit of new Sen Joe Manchin now OPPOSING Bidens spending bribe of $2Trillion. Maybe Rep and JM will come up with Infra Plan that is America First, instead of the Biden/China first plan.

[Amouna]

If this administration had half a brain running it, they could just look back at the American Jobs Act of 2011 under Obama and realize that ill-structured, badly thought out Federal Government stimulus is nothing but pork to a select few. It doesn't nearly benefit the economy as much as it costs the regular taxpayer but, of course, politicians will never admit to that.

[The Rutledge Group]

@Amouna "If."

[LostOkie51]

@Amouna If frogs had wings...

[eurdone88]

@Amouna
It'll be a hell of a lot better than giving tax cuts to corporations and billionaires.
The country needed to spend $4T in infrastructure to repair roads, bridges, dams, invest in EV charging stations, invest in solar and wind, etc.
This will be a start - after 4 years of a Republican administration only interested in authoritarian gaslighting and pinning medals on their own chests.

[Trading Places Research]

Interesting discussion below on labor, so I just wanted to give a little color there from $MTZ, whom I follow closely and have a lot of overlap with the bill.

There is no pool of skilled labor out there looking for work. A lot of this is highly specialized stuff. In some of it, the main skill is Not Dying At Work. MTZ has been on a hiring binge in Communications for the 5G buildout, but also in their smaller Renewables unit which has been growing like a weed. These are expensive hires, because they have to invest a lot in months of training before they can send people out to a site, and trust that they will not die.

Anyway the point is:
-Ramp up costs are VERY expensive here
-But it is possible to do it, because this is high-paid skilled labor to begin with

[Longlonebull]

Awesome well thought through. In my opinion there is a bottleneck that has not been addressed and that is people, employees, dhighly skilled engineers, there is a shortage. This cannot be addressed until 2023. Your thought

[Trading Places Research]

@Longlonebull See above

[Oldwizkid]

The bill is dead on arrival. Remember we couldn't secure our border and two trillion just isn't enough for hypocrites/ democrats.

[eurdone88]

@Oldwizkid Manchin said he wants 25% instead of 29% corporate tax rate.
It's called negotiation and compromise.
Don't worry cupcake, the tax rate could be 45% and Amazon will somehow still pay $0 in taxes because MERICA and FREEDOM.

[Oldwizkid]

The bill is dead on arrival. Remember we couldn't secure our border and two trillion just isn't enough for hypocrites/ democrats.

[investingInvestor]

Congress needs to debate this bill. OMB needs to vet this plan. Industry needs to advise Government on detailed parts.

SA: listen to Bankers' evaluations carefully. This is the start of a long and winding road up Pikes Peak like turns. The outcome will be significantly modified. After all is said and done, much more is said than done.

From my POV, I want to hear from the Program Managers & Project Managers ASAP.

[G. Blair Bauer]

I think it is worth a shot. Looks like this is aimed and at the lower and middle classes.

[blorber]

@G. Blair Bauer your kids will pay the bill. Better be sure it is worth it

[G. Blair Bauer]

@blorber ,I have been paying the bill since Reagan and the Republicans started all this deficit spending in the 1980's. It just keeps being passed on.

[Larry Ev]

@G. Blair Bauer It does seem to be passed on but it's actually like the guy who jumped from the twentieth floor of the skyscraper. When he passed the ninth floor on the way down someone asked him how things were going and he yelled "it's great! best time I've ever had"

Not sure what floor we're passing though.

[gdinero]

The biggest problem I see in all this is labor. There is an existing shortage of skilled labor to do the work now. And I read where it might be just union labor which is completely ridiculous. Lots of states out there with very few unions. And if you waive college debt and make it free, most young people won't want to become a welder/construction either. There quite simply won't be enough labor.

[Trading Places Research]

@gdinero Yes. That’s why employment and training services. But also remember, this is over 8 years

[Phiota]

@gdinero It’s a chicken and egg problem. For decades skilled labor wages were pushed down by outsourcing and illegal immigration so not many people want to go into those fields.

[Trading Places Research]

@Phiota Those wages are actually relatively high.

[Greg_Maryland]

Very nice note.

[PipelineDancer]

Thanks for leaving the politics out of it and just tearing into the details and starting to think of winners and losers. I found it to be a great introduction.

[Trading Places Research]

@PipelineDancer I was going to finish up with a plea to leave politics out of the comments, but then I realized that was trying to hold back the tide with a sponge. 🤷‍♂️

[100centsofadollar]

@Trading Places Research I think there is at least one other SA author who insists on no politics and deletes comments that violate that edict. If possible I endorse that course of action. I don't view it as censorship, as we are here with the stated purpose to talk investments, to edit out those who prefer to respond as if this were a call in show with Tucker Carlson. They are insistently rude, annoying and disrespectful of our time and focus. I hope those who run SA take notice that these political comments taking up the comment sections of so many authors are detrimental to the SA experience.

[Trading Places Research]

@100centsofadollar That may be a Marketplace author who have more control. I can’t delete, but I am reporting all the racist stuff, and muting anyone who is here to talk shit.

FWIW, SA leadership wants no part of politics